City panel lets AEG rebid on L.A. Convention Center contract

Los Angeles Times

The Los Angeles Convention Center.

The Los Angeles Convention Center. (Los Angeles Times)

Catherine Saillant

A committee of Los Angeles City Council members voted unanimously Monday to solicit a new round of bids for a private Convention Center operator, ensuring that Anschutz Entertainment Group will have a shot at the contract after being threatened with exclusion.

City Administrative Officer Miguel Santana last week announced that AEG was "non-responsive" to the city's request for a contract proposal. The firm, which built and operates Staples Center and L.A. Live, the Convention Center's immediate neighbors, returned its application on time but failed to produce financial documents, Santana said.

On Monday, Santana asked the council's Trade, Commerce and Tourism Committee for direction on how to proceed. Without AEG, the city would be left with a single bidder, he said.

Bob Newman, president of AEG Facilities, the division seeking the contract, told committee members it has every intention of proving its financial worthiness. "We're 100% committed," he told panel members.

AEG's stature at City Hall has taken some blows lately. After securing an agreement last year to build a new football stadium on the site of the Convention Center's west hall, AEG chief Philip Anschutz shocked the downtown establishment by parting ways with Tim Leiweke, the respected executive who had brokered the deal.

Anschutz announced he would personally take over negotiations to bring an NFL team to Los Angeles, considered crucial for the stadium project to move forward.

The "non-responsive" bid to operate the Convention Center comes at a sensitive time.

AEG, in letters to the city, said it had been reluctant to turn over documents, including credit reports, corporate tax returns and income statements, because it is a privately held company involved in deals around the globe.

The company has since delivered a box a financial documents that have not yet been reviewed, Santana said.

"We're not asking for any favoritism," said Ted Fikre, AEG's vice chairman told the board. "We're just asking for a chance to bid on this."

More than a dozen AEG supporters asked the city panel to give the company another chance, citing its high-profile role in redeveloping the downtown area and providing jobs.

After meeting privately with city attorneys, the committee announced it would start the bidding process over. To allow AEG to simply supplement its bid after the deadline passed could be legally risky, city attorneys said.

Committee members urged staff to move as quickly as possible. The full council will review the matter Wednesday, and the new request for proposals could be ready within days, Santana said.

Councilman Bill Rosendahl said it was a "no-brainer," calling AEG the "elephant in the room."